Painting to Van Gogh.
Music to Mozart.
Writing to countless writer, Wilbur Smith, Alexander Solzenitzyn to name a few.
I write about economics, justice, equality.
Finding solution to a common problem.
Amartya Sen, Pramoedya Anantha Toer, I like their writing.

Wednesday, May 14, 2008

Title: The impending economic and food crisis; what are we doing about it III

So far as I can see, our Govt hasn’t done anything much. I suppose the PM is aware that this might sink the BN Govt. Yes PM has made statement that stockpiling food is priority and takes precedent to development.

That is the reason why some projects has been shelved, like the second Penang bridge and the development corridors. No, it hasn’t register to average Malaysians that price hike in fuel and food might be serious enough that we should start make some lifestyle changes.

To me, the answer to this food scarcity problem lies in the economics of food itself. Scarcity will result in price increase that is basic. The Prophet forbids Muslims from hoarding food during the time of scarcity, to profit from price increase. But did the prophet prescribe price control? Absolutely not. Instead the Prophet introduces the principle of sharing, and piety however little food we have.

So we should let the price of rice, flour, sugar and bread increase, because we will reduce consumption of these staple foods and replace them with other types of food, like tapioca, yam, bananas and breadfruit. Higher prices will encourage farmers to work on their lands. We all know that there are thousands of acres of idle lands in Peninsula not counting Sabah and Sarawak. Previously, rice farming was not profitable. I know, I came from rice farming village in Tanjong Karang. The price of padi paid to the farmers is too low that it was not that profitable to grow padi. So if the price of rice is high, more farmers would work on their land to produce more rice for the nation. Idle lands would be used to grow corn, tapioca, bananas and yam to supplement our rice requirement.So in the long term we would be self sufficient in our food supply.

What about short term? How would poor urban dwellers cope with inflation and savage price increases in food, transportation and other costs? As Pakatan Rakyat manifesto before PRU12, I support their suggestion for cash grants to low income Malaysian using profit money from Petronas, say at RM1000 per month per household, depending on how many in the family. We should also have minimum wage of RM900 per month for every worker with RM300 cost of living allowance as suggested by MTUC. Then low income household might be able to cope with price increases if price of goods and services is uncontrolled.

Let the market find the equilibrium in prices of goods, but we must also fairly compensate the low income earners. What this actually do is reduce the gap in purchasing power among us.

Petrol subsidy? Remove it. We could use the money to finance the cash grant above. People could make better decision if they are given money instead of consumption subsidy like the petrol subsidy. Some people might spend the cash grant to buy petrol, but some people might be better of cycling to work and save the money for other stuff.